By Samiat Apr, 28, 2025 Technology

Nvidia Stock Slides as Huawei Prepares New AI Chip Following U.S. Export Restrictions

Nvidia (NVDA) shares fell by as much as 2% in early trading on Monday after reports surfaced that China's Huawei is preparing to launch an advanced AI chip. This development comes in the wake of U.S. export restrictions, introduced under former President Trump's administration, that targeted Nvidia’s sales to China.

According to The Wall Street Journal, Huawei has begun discussions with Chinese tech companies to test its new Ascend 910D chip, which aims to outperform Nvidia’s H100 AI chips. The 910D model follows the previous 910B and 910C versions and is currently still under development.

In addition, the Journal reported that Huawei is gearing up to deliver over 800,000 units of its Ascend 910B and 910C chips to clients, including state-backed telecom firms and AI-focused companies like ByteDance, the parent company of TikTok.

Nvidia’s stock has been under pressure recently after the company revealed in a regulatory filing that U.S. authorities had effectively halted the export of its H20 chips—products tailored for the Chinese market—to comply with tightening trade restrictions. Nvidia expects the move to result in a $5.5 billion loss, with JPMorgan analysts projecting the ban could cost the company up to $16 billion in revenue this year.

China remains a significant market for Nvidia, accounting for about $17 billion, or 13%, of its fiscal year 2025 revenue, according to Bernstein. DA Davidson’s Gil Luria suggests the figure might be even higher, potentially reaching 40%, factoring in estimates related to unofficial chip sales.

Further pressure on Nvidia's stock came last week after Reuters reported that Huawei’s 910C chips—seen as competitive with Nvidia’s H100—could start shipping as early as May. The H100 chips, originally banned from China in 2022, are two generations older than Nvidia’s newest Blackwell series.

So far in 2025, Nvidia’s shares have dropped more than 17% amid growing investor concerns over AI spending trends among major tech companies and the escalating U.S.-China trade tensions.

Adding to the challenges, the U.S. government recently initiated a probe into Nvidia’s AI chip usage in China. At the same time, CEO Jensen Huang has been working on strengthening relationships by visiting Chinese officials and investing heavily in domestic expansion. Nvidia has pledged $500 billion toward boosting the U.S. AI supply chain.

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